Best place to post question about In-Plant budgets

[pvadebon]

I have a question about budgets in an In-plant, but could not locate the appropriate forum to post. Please help.

We have an in-plant that we operate as part of our local Career & Technical Center. In addition to training students, we have a small staff the runs production for the school division. We have a "0" based budget which includes categories for "purchased services" for things like copier leases, "compensation" for salaries, and "materials and supplies". As we spend down these individual categories, we approach "0" monies left.

As we are taking on more work, our materials and supplies budget has already been depleted for the year. The finance office now has to pull money out of other categories to keep enough money in materials and supplies so we can order more. Since we charge for the cost of supplies+, we are bringing in more then enough funds to replace what we are spending. But they indicate we have to wait until the end of the budget year (June 30) to determine if we have any surplus to use.

My question is: how do other in-plants handle this. How do you replace the supplies you need to order to complete customers jobs without running out of supply money before you budget year. If we get any big requests for print jobs over the next few months, we will not be able to order any more supplies as all the other categories will have been transferred to our supply account.

 

[rbailleu]

don't get me started on implants. more on this after the important part. In your case, it makes a little sense. you are educating people.

but if you are going to run this for a profit to cover the expenses you need to work out a business based budget. and run a separate account from the rest of the organization. of course there would need to be some oversite.

some items to include in a budget.

expenses:
rent or share of sqare foot expense
utilities
equipment
supplies
leases
labor

you should get some form of estimating software like franklin estimating so that you know your covering your expenses. if your making a profit the money should be in the account. you should put the income from the jobs in you print shop account. no print shop could run if they started the year with a set paper budget and never put money back into it. this would only work if you did exact the same amount of printing every year. maybe what you need is an education paper budget and a separate print shop account/budget.

/rant on (you should not read further if you don't like negativity.)

this is assuming (I know my bad) you are a tax supported institution.

if your in competition with a printshop that pays taxes. I hope you're not undercutting their price.
When I am in that situation I get a little upset. how ever if you run a profit and help reduce the tax burden for the community then you have done something very rare. and I mean cover the expense of labor, machinery, paper, electricity, etc. because thats what the printer that pays taxes does.

/rant off

best of luck. I hope there is an intelligent, business minded person in the acconting office.

 

[CSimpson]

I run an inplant in a large public entity.

We have a working materials and supplies budget and a working equipment rental budget. What I mean by that is they give me funds to last 3 months in each account at the start of the year.

I turn in charges monthly to accounting by fund number and that fund number charge is broken down by a rental of equipment and by materials and supplies. The rental of equipment accounts for any monthly payments we make for equipment including click charges. Materials and supplies cover pretty much all other expenses minus facilities and labor.

The end goal is to end the year with the same amount of money in both accounts that I started the year with.

 

[pvadebon]

Follow-up to my question

Follow-up to my question

While we are primarily a training facility, the school division added a full time person and two part time staff to take on the school divisions work. We only do Non-profit work. The second year students are here from 11:30 until 2 pm. In addition to training, they do some of the live work. The full time person comes in at 10:30 to manage the main production. He and I work with the students on the live printing jobs.

Our budget the first year was under $100,000. In the first 6 months of that year, we had blown through our supply budget since we had no idea how much work the schools were going to send us. The second year, we budgeted double the amount. We again have spent all the money that was budgeted for materials and supplies. When planning the budget for the proceeding year, we can only guess how much work we will be bringing in to determine how much to put in our materials and supplies portion of the budget. If we put too much in and at the end of the budget year have too much left over, the bean counters don't like that and want a justification on why we need so much in that account.

We are seeking what other in-plants do regarding budgeting for materials and supplies so you can recover what is spent out of that category and have enough if you get several big orders and need to order paper etc.